We Need a Name for This: Friday the 13th Edition
In this week’s episode of “we need a name for this phenomenon” consider the following two circumstances.
- I was doing an interview the other day when the interviewer asked me for a simple, “back of the envelope” way to understand which foods/products were “better” for the environment. Without getting into the nuances of the question, I replied, “just look at the price.” Which, of course, to an economist is utterly unsurprising. Well, duh! If the price captures the value of the resources embedded in the product, then the good with the lowest price would seem at the margin to be the one that is “best” for the environment. And I suggested that so long as prices are “close to right” then this is a good idea. Her response? Well, the US subsidizes corn and oil and other products, so we cannot rely on prices. In fact, she was pretty confident that because the US intervened in so many markets that we had no choice but to ask for it to … stop doing it intervene further.
- We see the same mentality in the “debate” over health insurance. We have a stupidly fragmented system of state restrictions on the ability of insurers to operate across state lines. One useful deregulation would be to end this – allowing insurers to both craft products specific to the interests of customers and more important to establish much larger pools of people among which to insure risks. But since the system is so poorly regulated, one major justification for the PPACA and the health insurance mandate is to create a larger group insurance pool – precisely the thing that current regulations prevent.
These sorts of things are so common that they really do need a name. It’s not really correct to call these Trojan Horses for statism – there’s nothing mysterious about them. So, for fun, enter below your favorite example and I’ll buy dinner (a cheap one of course, I am a greedy capitalist) to the best nomination for a title for this phenomenon.